What is Market Research?

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Posted Jul 10, 2018

Market research is a systematic practice of assembling, examining, and interpreting data collected about a target market to better understand the needs of such people or companies. The groundwork of any prosperous company starts with market research as it can be used for various purposes such as, identifying a new market or launching a new business. The data output of market research can help business owners make educated decisions about business tactics, operations, and a potential consumer base. Overall, market research can help ensure that a business functions more efficiently and markets the company more effectively.

Make Market Research a Priority

Market research not only helps entrepreneurs with making informed decisions but takes the guesswork out of improving or applying resources into budding ideas and projects. With that in mind, businesses of all sizes should consider market research a priority for the following reasons;

Consumer Perspective: Customer perception is key, so it is important to establish an open line of communication with your customer base. Through market research companies can better understand and continue to meet and exceed customer needs. Remember, focusing on consumers and their perspective is critical to growing a successful business.

Time Management: When properly managed, market research should reveal what is most important to your consumers, which in turn, will help prioritize and maximize your time and resources more effectively. Market Research can shed light on both short-term and long-term marketing goals, paving the way for a lucrative marketing plan. Profitable Growth Opportunities: The goal for any entrepreneur is to grow their business, but at times the path to profitably isn’t always apparent. Market research can help business owners evaluate and measure opportunities to prioritize those with the highest revenue potential.Stay Current: Conducting regular research enables the business owner to evolve and adapt to meet the long-term needs. While short-term plans are significant, focusing too much on the short-run can limit the longevity and relevancy of your company in the future. Typically, there is no shortage of competitors, so it is vital to stay current and keep up with consumer, product, and industry disruptions.Reduce Risk: Market research can provide insightful information about your target market, product or service, competition, and more. Using research to back-up your marketing decisions, can help optimize brand strategy choices and minimize the risk for failure.Ultimately, market research is essential to a business’s long-term success and utilizing the appropriate research methods will certainly help keep any company afloat.

Types of Market Research

The research industry is full of a vast amount of market research tools, but specifically there are two types of market research data; primary and secondary. The types of information collected through both primary and secondary sources can be either qualitative or quantitative. Qualitative sources help provide a better understanding of consumer opinions and behaviors around specific topics. Quantitative information is based on statistics and tends to be more systematized.Primary information is made up of first-hand data gathered from original sources. Such data can be collected by an individual researcher or hired sources. The main concept behind primary information is that the process is controlled by a person from start to finish. Even though primary research is often more expensive and time-consuming, the tools are the best way to get the information that your business needs. The most popular primary research tools include: customer surveys, in-depth interviews, focus groups, and observation.Secondary data includes information that has been assembled by others and is publicly available either online or offline. Unlike primary data, the public has access to the same information and there is no control over the data collection methods. Secondary market research is best suited for gathering broad insights into market trends and predictions and analyzing the current situation in terms of competition. The most popular secondary research sources include; government reports and studies, magazines, newspapers, television and radio, educational resources, literature reviews, and online articles and case studies.The difference between primary and secondary research is that primary can be more time-consuming and expensive, but sometimes it’s the only way to get the information you need. Whereas secondary research can be a great starting point to better understand industry trends and broader shifts.

The Takeaway

The purpose of market research is to provide information that will assist you in making better decisions, to help your company be more successful. Conducting meaningful market research will require a financial plan, but the results can help ensure whether a product or service is truly ready for market. Assuring that product or service will meet customer expectations in price, reliability and functionality can help declare a company’s future in their industry.

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